Timing b Revenue recognition criteria 3 Cash collection a Sales discounts b

Timing b revenue recognition criteria 3 cash

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a. Timing b. Revenue recognition criteria 3. Cash collection a. Sales discounts b. Sales returns and allowances c. Control of cash 4. Accounting for non-payment by credit customers a. The allowance method b. Bad debt accounting examples 5. Evaluating receivables management 6. Recording warranty and service costs associated with a sale 7. Reconciling the bank account B. Inventory and the cost of sales (Chapter 7) 1. Inventory and cost of goods sold a. Definition of inventory b. Costs included in inventory cost c. Ownership of inventory d. Ending inventory and costs of goods sold 2. Accounting for inventory purchases and sales a. Overview of perpetual and periodic systems b. Perpetual and periodic journal entries 3. Counting inventory and calculating cost of goods sold a. Taking a physical count of inventory b. The income effect of an error in ending inventory 4. Inventory cost flow assumptions a. Specific identification b. First in, first out (FIFO) c. Last in, first out (LIFO) d. Averaging 5. Evaluating investment management a. Evaluating the level of inventory b. Number of days’ purchases in accounts payable 6. Inventory errors 7. Complications of the perpetual method with LIFO and average cost 8. Reporting inventory at amounts below cost a. Inventory valued at net realizable value b. Inventory valued at lower of cost or market C. Completing the operating cycle (Chapter 8) 1. Employee compensation a. Payroll b. Compensated absences (for example: sick leave) c. Bonuses 2. Taxes a. Sales taxes b. Property taxes c. Income taxes 3. Contingencies 4. Capitalize vs. expense a. Research and development b. Advertising 5. Summarizing operations on an income statement a. Other revenues and expenses b. Extraordinary items c. Earnings per share
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9 EF/AB d. Differing income statement formats IV. Investing and Financing Activities 25 PERCENT OF EXAM | 34 HOURS OF STUDY Ch. 9, Investments: Property, Plant, and Equipment and Intangible Assets Ch. 10, Financing: Long-Term Liabilities Ch. 11, Financing: Equity A. Investments: Property, plant, and equipment and intangible assets (Chapter 9) 1. Long-term operating assets 2. Deciding whether to acquire a long-term operating asset 3. Accounting for acquisition of property, plant, and equipment a. Assets acquired by purchase b. Acquisition of several assets at once 4. Calculating and recording depreciation expense a. Straight-line method b. Units-of-production method c. Partial-year depreciation calculations d. Units-of-production method with natural resources 5. Repairs and improvements 6. Disposal a. Discarding b. Selling 7. Accounting for intangible assets a. Amortization b. Impairment 8. Measuring property, plant, and equipment efficiency a. Evaluating the level of property, plant, and equipment b. Industry differences in fixed asset turnover 9. Accelerated depreciation methods a. Declining-balance method b. Sum-of-the-years’-digits method 10. Changes in depreciation estimates and methods B. Financing: Long-term liabilities (Chapter 10) 1. Measuring long-term liabilities a. Present value and future value concepts b.
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